MetLife, Norges Bank Create JV to Invest in U.S. CRE Market

MetLife and Norges Bank Investment Management have teamed on a joint venture to invest collectively in Class A office properties in key U.S. markets, making its initial investment in One Financial Center in Boston.

METLIFE MetLife, Inc. and Norges Bank Investment Management have teamed on a joint venture to invest collectively in Class A office properties in key U.S. markets, making its initial investment in One Financial Center in Boston, Mass.

“It was a great opportunity for us in our investment management business to partner up with someone like Norges Bank who has the investment strategy that matches up so well with ours in terms of ownership of long-term, quality real estate,” Robert Merck, MetLife’s global head of real estate, told Commercial Property Executive. “We have an active pipeline of opportunities and our goal is to grow this partnership as other opportunities present themselves and we feel really good about being able to do that.”

One Financial Center, located at 10 Dewey Square in Boston’s financial district, is a 46-story, Class A office building totaling 1.3 million square feet.

NBIM’s joint venture with MetLife, Inc. marks the fund’s third U.S.-focused real estate investment platform. NBIM will hold a 47.5 percent stake in the joint venture, while MetLife, Inc. will have the remaining 52.5 percent stake, increasing the share of the asset it already held by 2.5 percentage points.  MetLife will also be the asset manager of the platform.

According to Merck, the building fits the joint venture’s strategy to a tee, targeting opportunities to leverage its scale to create long-term value for its investors.

“Our strategy is to invest in core CBD office properties in the top-tier markets in the U.S. and One Financial definitely fits that,” Merck said. “It is one of the top properties in Boston and we were involved in developing the property so ownership made sense.”

MetLife is one of the largest investors in the industry with $55.1 billion in real estate invested assets, including $43.1 billion in commercial mortgages and $12.0 billion in equity investments at the end of 2012.

Both companies have been very active in 2013, with NBIM entering into a $1.2 billion joint venture with TIAA-CREF, of New York, gaining substantial interests in five Class A or boutique buildings on the East Coast; and Boston Properties selling its ownership interest in Times Square Tower for $684 million.